New home launches rose 30% in March quarter: Assocham

NEW DELHI: Launches of new homes rose by 30 per cent during January-March period of 2014 in anticipation of recovery in the property market post-election, according to industry body Assocham.

The launches of new homes amid slowdown in demand led to rise in unsold inventory by nearly seven per cent, it added.

"After four consecutive quarters of muted launches, such activities showed improvement at the country level. Ahead of general elections, developers had launched many projects to gain competitive advantage and, at the same time, anticipated a recovery in market conditions post-polls.However, a slump in demand led to buyers taking a cautious approach. The number of unsold units rose 6.7 per cent quarter on quarter because of the large number of new launches amid a prolonged slump in sales. New launches increased by about 30 per cent q-o-q in Q1 2014," Assocham said in a statement.

While there was an improvement in new launches, sales continued to remain low despite developers offering attractive pricing schemes and discounts to attract buyers, it added.

"Liquidity and high level of leverage remain big issues with the real estate developers. These two issues can ultimately get resolved with pick up in the economy and a smart recovery in demand for housing units," Assocham Secretary General DS Rawat said.

"But there is a lag between improvement in macro picture and its impact on the real estate market, particularly in the residential segment which is highly sensitive to the interest rates and the job market, which needs to be robust for the demand rebound," he added.